Asian Markets Track Wall Street Lower

Asian stock markets are mostly lower on Wednesday, following the negative cues from Wall Street overnight, as traders remain uncertain about the outlook for the markets following recent volatility. They also remain reluctant to make significant moves ahead of the release of key US GDP and inflation data later in the week, which could have a significant impact on the outlook for interest rates. Asian markets closed mixed on Tuesday.

Australian shares are trading slightly higher on Wednesday, giving up some of the gains in the previous session, with the benchmark S&P/ASX 200 staying below the 8,000 mark, following the broadly negative cues from Wall Street overnight, with gains in gold miners partially offset by weakness in iron ore miners and energy stocks. Weak business activity data dampened investor sentiment.

The benchmark S&P/ASX 200 Index is gaining 1.90 points or 0.02 percent to 7,973.00, after hitting a low of 7,944.30 earlier. The broader All Ordinaries Index is up 5.30 points or 0.07 percent to 8,213.90. Australian stocks ended notably higher on Tuesday.

Among major miners, BHP Group and Fortescue Metals are losing almost 1 percent each, while Mineral Resources is declining more than 4 percent and Rio Tinto is edging down 0.2 percent.

Oil stocks are weak. Beach energy is losing more than 2 percent and Woodside Energy is down more than 1 percent, while Santos and Origin Energy are edging down 0.3 to 0.5 percent each.

In the tech space, Afterpay owner Block is losing almost 2 percent, while Appen is gaining more than 1 percent and Xero is edging up 0.3 percent. Zip and WiseTech Global are flat.

Among the big four banks, Commonwealth Bank and ANZ Banking are edging down 0.2 to 0.5 percent each, while National Australia Bank and Westpac are edging up 0.1 to 0.2 percent each.

Among gold miners, Resolute Mining is gaining 3.5 percent and Newmont is edging up 0.3 percent, while Evolution Mining. Northern Star Resources and Gold Road Resources are adding more than 1 percent each.

In economic news, the manufacturing sector in Australia continued to contract in July, albeit at a slower rate, the latest survey from Judo Bank revealed on Wednesday with a manufacturing PMI score of 47.4. That’s up from 47.2 in June, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. The report also showed that the services PMI dipped to 50.8 from 51.2 in June. The composite index fell to 50.2 from 50.7 in June.

In the currency market, the Aussie dollar is trading at $0.660 on Wednesday.

The Japanese stock market is modestly lower on Wednesday, giving up the slight gains in the previous session, following the broadly negative cues from Wall Street overnight. The Nikkei 225 is falling to stay a tad above the 39,500 level, as traders reacted to the latest business activity data with weakness in some index heavyweights and financial stocks partially offset by gains in technology stocks.

The benchmark Nikkei 225 Index closed the morning session at 39,508.84, down 85.55 points or 0.22 percent, after hitting a low of 39,263.81 earlier. Japanese stocks ended slightly higher on Tuesday.

Market heavyweight SoftBank Group is edging up 0.5 percent, while Uniqlo operator Fast Retailing is losing almost 1 percent. Among automakers, Honda is losing almost 1 percent, while Toyota is advancing almost 2 percent.

In the tech space, Advantest is gaining more than 1 percent, Tokyo Electron is adding 1.5 percent and Screen Holdings is advancing more than 3 percent.

In the banking sector, Mizuho Financial is losing almost 1 percent, while Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are edging down 0.2 to 0.5 percent each.

Among the major exporters, Canon is gaining almost 1 percent and Sony is edging up 0.1 percent, while Panasonic is losing more than 1 percent and Mitsubishi Electric edging down 0.1 percent.

Among other major losers, Mitsubishi Motors is plunging almost 8 percent, Sumitomo Chemical is losing almost 4 percent and Kansai Electric Power is declining more than 3 percent, while Sumitomo Pharma and Isuzu Motors are down almost 3 percent each.

Conversely, Nidec is surging more than 7 percent and Chugai Pharmaceutical is gaining more than 3 percent.

In economic news, the manufacturing sector in Japan slipped into contraction territory in July, the latest reading from Jibun Bank revealed on Wednesday with a manufacturing PMI score of 49.2. That’s down from 50.0, and it falls beneath that mark that separates expansion from contraction. The survey also showed that the services PMI improved to 53.9 from 49.4 in June, and the composite index likewise improved to 52.6 from 49.7 a month earlier.

In the currency market, the U.S. dollar is trading in the lower 155 yen-range on Wednesday.

Elsewhere in Asia, China, Hong Kong, Singapore, South Korea, Malaysia and Indonesia are lower by between 0.1 and 0.5 percent each. Taiwan and New Zealand are up 2.8 and 0.4 percent, respectively.

On the Wall Street, stocks showed a lack of direction over the course of the trading session on Tuesday, with the major averages bouncing back and forth across the unchanged line following the strong upward move seen in the previous session.

The major averages eventually ended the day modestly lower. The Dow slipped 57.35 points or 0.1 percent to 40,358.09, the Nasdaq edged down 10.22 points or 0.1 percent to 17,997.35 and the S&P 500 dipped 8.67 points or 0.2 percent to 5,555.74.

Meanwhile, the major European markets ended the day mixed. While the German DAX Index advanced by 0.8 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index fell by 0.4 percent and 0.3 percent, respectively.

Crude oil prices fell to near seven-week lows on Tuesday as investors brace for a likely drop in demand. West Texas Intermediate Crude oil futures for September ended down $1.44 or 1.83 percent at $76.96 a barrel, the lowest settlement since June 7.

Market Analysis